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KAIA Legislative Update - January 17, 2018

For the first time in history, Republican governor Matt Bevin presented his version of the biennial budget to both a Republican-controlled House and Senate this evening. Taking the position that government’s functions should be limited to protection of citizens, infrastructure and education, the Governor outlined his priorities for “getting Kentucky’s financial house in order.” 

Highlights of the Address 
1. The Budget fully funds pensions costs for state employees and the Teachers’ Retirement System’s funding request with a combined total of about $3.3B over the biennium. SEEK allocation funds are being maintained at $3,981 per pupil, but the Budget shifts responsibility for employee health insurance to local districts, who are also being asked to reduce administrative costs and use their reserve funds. 

2. The Budget continues the investment in workforce development with another $100M bond pool for projects with local matching funds and private investment. 

3. The Governor’s focus on public protection was evident in budget proposals that: 

  • support the war on the state’s opioid crisis with $34M in additional funding;
  • fund 75 new prosecutors and 51 new public advocates to reduce legal case backlogs;
  • fund the replacement of aging state police equipment;
  • adding $24M for adding social workers and substantially increasing salaries; and
  • added a new program with about $11M to support foster children and adoption initiatives. 

4. The Budget’s sizeable pension funding required cuts that including the elimination of 70 programs and 6.25% across the board cuts in state government, excepting items such as SEEK. 

5. The Governor noted the recently approved 1115 Medicaid waiver as a reform that will enable cost management in the future. 

6. The Governor announced a policy of managing the criminal justice system with the aim of needing to build no more prisons in the state. 

7. Tax modernization was made a priority for 2018, though the likelihood of a special session remains unclear. 

8. The Budget allocates $250M to the state Rainy Day Fund which has a current zero balance, about half of what is recommended by best practices. 

KAIA will host a legislative reception on Tuesday, February 13, 2018, from 6:00-8:00 PM in the Single Oak Room at the Buffalo Trace Distillery in Frankfort. Mark your calendars and plan to attend to meet key movers and shakers in the General Assembly, and network with other Automotive Industry members!

A Special Invitation for KAIA Members
Want to learn about the key issues and have an opportunity to get your questions answered and your voice heard? Our friends at the Kentucky Association of Manufacturers (KAM) have graciously extended an invitation to all KAIA members to join their weekly conference calls! Key information is included below. Join in and be a part of the conversation every Thursday at 4:00 PM EST!

Here is the call-in information for Thursday’s KAM Conversations, scheduled for 4:00 PM EST:

  • Dial-In Number:               877-746-4263
  • Participant Code:            0219774#

As always, if you have questions and/or need additional information, please do not hesitate to contact us!

Dave Tatman